The PC Jeweller board has announced a share buyback worth Rs 424 crore, at a price of Rs 350 per unit, 67 percent higher than the closing price of Rs 209 on Thursday. The buyback involving 1.21 crore or (3.07% stake) shares was approved at a board meeting on Thursday. The promoters and the promoters group will not participate in the buyback of shares.
Data at the end of March quarter show, the promoters have 57.63 percent stake in the company. LIC holds about 1.93 percent.
The stock opened 18% higher in early trade today on the news of share buyback. It hit an intra day high of 247 in trade. It has been volatile for the last few sessions and is down 53% since the beginning of this year. At 10:28 am, the stock fell 4.02% to 200.60 on BSE.
The PC Jeweller stock has been gaining for the last three days and risen 6.02% during the period.
But on May 3, the stock hit its 52-week low of 95.05 after falling 14% intra day. The stock fell to new yearly lows amid news that FMR LLC, a fund managed by Fidelity International on April 30, sold over 1.3 crore shares of PC Jeweller through open market transaction.
Before the disposal, Fidelity managed funds had 2.77 crore shares in the company equivalent to 7.04 per cent stake. The company said FMR LLC sold nearly 47 lakh shares of PC Jeweller through open market transaction taking the two day stake sale to nearly 1.77 crore shares.
Before the share sale, the stock was hit by two issues.
First, there has been speculation that the company's promoters might have held back information on a business relationship with e-governance service provider Vakrangee, a company, which according to reports came under Sebi's scanner for alleged price and volume manipulations of its own stock on BSE and NSE. However, Vakrangee on February 3 clarified that rumours of involvement of company in price and volume manipulation were completely baseless and factually incorrect.
On January 25, 2018, Vakrangee bought 20 lakh shares of PC Jeweller at Rs 561.71 on NSE.
Secondly, according to reports, PC Jewellers promoter Padam Chand Gupta gifted some his stake to family members via off -market transactions. Even as the firm has said it would make requisite disclosures in this regard from time to time, there are fears about more such deals taking place in the future.
PC Jeweller is engaged in the business of manufacture, retail and export of jewellery. The firm offers a range of products including 100% hallmarked gold jewellery, certified diamond jewellery and other jewellery, including silver articles, with a focus on diamond jewellery and jewellery for weddings. Established in 2005, PC Jeweller is the second-largest listed jewellery retailer in India.